Correlation Between North American and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both North American and Eaton Vance at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining North American and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North American Financial and Eaton Vance Senior, you can compare the effects of market volatilities on North American and Eaton Vance and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in North American with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of North American and Eaton Vance.
Diversification Opportunities for North American and Eaton Vance
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between North and Eaton is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding North American Financial and Eaton Vance Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Senior and North American is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on North American Financial are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Senior has no effect on the direction of North American i.e., North American and Eaton Vance go up and down completely randomly.
Pair Corralation between North American and Eaton Vance
Assuming the 90 days horizon North American Financial is expected to generate 8.99 times more return on investment than Eaton Vance. However, North American is 8.99 times more volatile than Eaton Vance Senior. It trades about 0.07 of its potential returns per unit of risk. Eaton Vance Senior is currently generating about 0.05 per unit of risk. If you would invest 306.00 in North American Financial on November 2, 2024 and sell it today you would earn a total of 211.00 from holding North American Financial or generate 68.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 68.83% |
| Values | Daily Returns |
North American Financial vs. Eaton Vance Senior
Performance |
| Timeline |
| North American Financial |
| Eaton Vance Senior |
North American and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North American and Eaton Vance
The main advantage of trading using opposite North American and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North American position performs unexpectedly, Eaton Vance can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Eaton Vance will offset losses from the drop in Eaton Vance's long position.| North American vs. Financial 15 Split | North American vs. Clough Global Ef | North American vs. Morgan Stanley India | North American vs. SEI Investments |
| Eaton Vance vs. MFS Investment Grade | Eaton Vance vs. Eaton Vance National | Eaton Vance vs. Nuveen California Select | Eaton Vance vs. Federated Premier Municipal |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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